BEIJING – Climate negotiators from around the world are headed for their annual pre-Christmas gathering, this year in Warsaw, with the goal of setting out concrete steps toward a binding global climate deal in 2015. As the Intergovernmental Panel on Climate Change highlights in its most recent report, money is the key to addressing global warming, which means that any strategy must account for trends in green investment.

The most important of these trends is developing countries’ growing role in financing green investments. To be sure, developing countries would prefer that developed-country taxpayers foot the climate bill, given their countries’ disproportionate contributions to global warming. But, fairness aside, this is not going to happen, at least not on the scale required to prevent environmental disaster and protect vulnerable communities. Indeed, over the last few years, developed countries have increasingly sought to evade their climate obligations.

For their part, developed-country governments want private investors to fill the gap, arguing that scarce public funds could be used more effectively to leverage profit-seeking green finance. Of course, developed-country institutional investors do manage a lot of the world’s investable cash – almost $95 trillion in 2011, according to the OECD. And a growing number of investors care about climate change, with 26% of asset managers (accounting for more than $12 trillion of assets under management) reporting that it factors into their investment decisions.

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